The case for conquest advertising—why competitive keyword bidding is fair

In keyword or pay-per-click advertising, companies bid on keywords so their ads appear as a top result whenever the keywords are searched. In “conquesting,” companies intentionally bid on search terms or keywords that relate directly to competitors to promote their own brand recognition or increase consumer interest over a competitor. Conquesting is controversial since it can ignite keyword bidding wars. It can also expose companies to liability in instances where the keywords are trademarks that are registered or owned by companies other than those bidding on them. Recently, however, the Ninth Circuit upheld the right to bid on keywords without invoking trademark infringement. In a suit between competing Arizona personal injury law firms, the U.S. Court of Appeals for the Ninth Circuit in October affirmed that the plaintiff failed to establish a likelihood of confusion by the defendant’s purchase of a keyword search term. Check out the latest Ad Age events and award programs The plaintiff claimed that the defendant engaged in conquesting by purchasing “Lerner & Rowe,” the name of its firm, so the defendant’s advertisements would appear in the search results. Despite being listed at the top of the results, the defendant’s advertisements did not include or reference the term “Lerner & Rowe.” In its determination, the Ninth Circuit used a four-factor test in determining confusion in a keyword advertising context: The court also contemplated other, less relevant factors, including “the proximity of the goods, similarity of the marks, marketing channels used, defendant’s intent in selecting the mark, and likelihood of expansion of the product lines.” While the first element, the strength of the mark, was undisputed—Lerner & Rowe’s mark is a strong mark—the Ninth Circuit found that the remaining three factors weighed in favor of the defendant. With respect to actual confusion, the court considered evidence from Lerner & Rowe showing that the defendant, Brown, Engstrand & Shely, received more than 200 phone calls in which the callers mentioned Lerner & Rowe in explaining why they called. The court also considered evidence showing that during the relevant period searches for “Lerner & Rowe” returned results featuring the defendant’s advertisement approximately 110,000 times, suggesting that, at most, 0.216% of consumers experienced confusion due to the defendant’s advertisements. Among other evidence, Brown, Engstrand & Shely offered an expert survey that found the customer confusion rate to be 0%–3%—which the Ninth Circuit was too small to support a likelihood of confusion. The court also emphasized that “Consumers who use the internet for shopping are generally quite sophisticated about how the internet functions,” suggesting that consumers who specified “Lerner & Rowe” in their search for legal advice are likely to be shrewd in their interpretation of the results returned from such online search. Check out the latest Ad Age events and award programs The court analyzed three screenshots that clearly labeled the search results for “Lerner & Rowe” beside Brown, Engstrand & Shely’s advertisements. It concluded that a reasonably prudent consumer would not easily be confused: When viewed as a whole, the results contained advertisements for the defendant, but also included results clearly labeled “Lerner & Rowe” and as such “dispelled any confusion defendant’s advertisements might cause.” In finding that Brown, Engstrand & Shely did not improperly use Lerner & Rowe’s trademark by bidding on and buying keyword advertising, the Ninth Circuit determined that conquesting campaigns are fair play. As conquesting may provide opportunities for competitors to take advantage of the popularity of market leaders, businesses that engage in such tactics should be careful not to cross the line and to ensure that the four-factor test favors fair play. Similarly, market leaders should be careful to monitor search results on their own name to ensure that competitors are not encroaching on their consumer base more than is legally permitted. In addition, while conquesting may be legally permissible, there are constraints on using a competitor’s trademark in other ways, and companies should proceed with caution when doing so. Super Bowl ad review The best and worst commercials from the Big Game Click here

The case for conquest advertising—why competitive keyword bidding is fair

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